Pshhhkkkkkkrrrrkakingkakingkakingtshchchchchchchchcchdingding*ding
The above “language” might look like gobbledygook to you.
But if you were born before 1990, you’d know what it was if you heard it.
That’s the ear-splitting sound made by your old dial-up modem. You remember the one you connected to your computer?
The dial-up modem was a frustrating technology.
If someone called you while you were surfing the web, you’d lose your internet connection.
Even worse, dial-up speeds were agonizingly slow. I remember spending hours trying to download music or videos.
Here’s why I’m telling you about dial-up modems…
Although they were groundbreaking, dial-up modems were a roadblock to widespread internet adoption.
That’s because they were unable to scale. In other words, you couldn’t make them faster.
Eventually, broadband cable solved this problem. It offered speeds up to 200 times faster than dial-up modems.
Today, we’re seeing a similar scaling problem with bitcoin.
But over the past couple of weeks, we’ve seen a pullback. That’s due to growing pains.
You see, bitcoin is a victim of its own success. Increased volume has overwhelmed the network and slowed down transactions.
On August 1, that’s all changing. A new solution could quadruple the number of transactions bitcoin can handle.
I’ll explain what’s happening in a moment…
The Internet’s Scaling Problem
Most of you probably remember how slow dial-up modems were. They had a top speed of 56 kilobits per second.
Broadband cable offers speeds between 1,000 and 11,000 kilobits per second. That’s 20–200 times faster.
In 2000, hardly anyone in the United States had broadband cable in their homes. By 2016, that number had grown to over 70%
During that span, internet usage among Americans increased from 43% to nearly 75%.
As you can see, the ability for the internet to scale in speed was key to the adoption of the technology.
Bitcoin’s “High-Speed Modem” Arrives on August 1
Back in March, I told you there was a schism in the bitcoin community on how best to scale the network. I called it the “nerd war.”
In short, there are two development teams working on solutions to the scaling problem. There has been a lot of uncertainty about whether they can come to an agreement.
SegWit2x is the name of one solution. Right now, it has gained the upper hand. (Bitcoin Improvement Proposal 148, or BIP 148, is the name of the other solution.)
As of now, more than 80% of the “miners” (the folks who provide the hardware that bitcoin runs on) have signaled their support for the SegWit2x code.
If all goes well, this code change will lock in on August 1.
Once that happens, bitcoin will be able to handle 12–28 transactions per second… up from its current three to seven transactions per second. That’s a fourfold increase.
Even better, Segwit2x paves the way for bitcoin to add scaling technologies that allow hundreds of thousands of transactions per second.
That would put bitcoin on par with other payment platforms like Visa and PayPal, which can handle thousands of transactions each day.
Assuming the SegWit2x solution is successful, bitcoin’s adoption could explode the way internet adoption exploded with the advent of broadband cable.
We could be witnessing the birth of bitcoin’s own “high-speed cable modem” moment.
A Flood of New Money
Once the uncertainty surrounding the code change passes, we could see a sea of new money flood into bitcoin.
A bitcoin price of $3,500–$5,000 this year is not out of the question.
Not only will bitcoin benefit… we think the entire cryptocurrency space will soar right along with it.
As more users come into bitcoin, they’ll naturally diversify into other coins. Our bet is that the entire cryptocurrency ecosystem could soar 10 times from here.
By: Big T..
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